Compare Money Guide Pro*
Take a look at page 20 of one of Money Guide Pro's sample reports. One trial illustrates a 60-year-old couple's million-dollar portfolio growing, in just 40 years, up to almost $44 million. Other trials show them running out of money. Might this be another example of a Monte Carlo simulation gone mad, one that produces meaningless results that bear no relation to the real world?
Even if the distribution is realistic, is the retirement spending behavior realistic? Would a typical couple let their portfolio grow to such extremes without dramatically increasing their retirement budget?
Even assuming the Monte Carlo model and spending behaviors are realistic, is the chart on page 20 something that would provide a client meaningful insight on choosing a stock/bond asset allocation? Didn't think so.
And what does the risk-free alternative look like? The chart doesn't illustrate a risk-free alternative.
So how, exactly, has this Monte Carlo simulation report empowered your client? It doesn't. It just dazzles and amuses.
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*Money Guide Pro is a trademark of PIETech of Powhatan, Virginia, with whom Prospercuity claims no association, affiliation, connection, or sponsorship